The local labour market effects of earthquakes

Using a balanced panel of local labour market areas (LLMAs) and adopting a new difference-in-differences approach with multiple time periods and multiple groups, this paper assesses the causal effects on local labour market outcomes of the earthquakes that occurred in Italy in 2009, 2012 and 2016. The results show a strong heterogeneity: the 2009 event had significant negative and persistent impacts on the employment rate of the LLMAs involved, while there were no adverse effects for the LLMAs affected by the earthquakes in 2012 and 2016. We also extend the analysis at the industry level in order to highlight the sectoral shifts that typically characterise the aftermath of these natural disasters.